Thursday, March 20, 2014

Pension revolution - or not!

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George Osborne's latest budget allows pensioners with private annuities to take all their
pension in a lump sum. We have been here before. What it amounts to is
another attack on our social security system. They know what they are
doing. Margaret Thatcher started this by bribing people with £200 (quite a lot of money then) out of the national pension pot to take out private schemes. Private schemes are there to make money for insurance companies (of which many Tory ministers are stakeholders) and not for the benefits of pensioners. Many took this bribe, and many private companies, after having taken huge profits and bonuses, declared themselves bankrupt.

What happened to those left in the lurch through these bankruptcies? They were incorporated back into the national pension scheme. What will happen to people who take a lump sum and squander it rather than take out an annuity? The same. We, quite rightly, do not want our old people to have no income and die in the streets. So they will be incorporated back into the state pension scheme, thus diluting its payout potential. It is a Tory policy. They think because they earn unimaginably high incomes, and will never be in need of a pension themselves, that small savers, small businesses and small investors are in the same position. This foolhardiness is encouraging debt. I fear for society, if it continues to exist in its current state, twenty years from now.